This is governed by the same principles of law as other contracts.
A sale is the transfer of the title in the thing sold from the vendor to the vendee in consideration of a certain money price. It assumes absolute immediate transfer. The elements that are essential to a valid sale are: (1) The thing or subject matter of the sale; (2) the price; (3) the mutual consent of the parties who have the ability to contract.
That which is to be sold must have either an actual or potential existence and must be capable of delivery, though it may not come into existence until after the date of sale. The subject of a sale must be legal to be valid.
Price is the consideration given by the purchaser in exchange for his property inducing the seller to part with the ownership. To constitute a sale the price in money, or its equivalent, must be a definite and certain sum or be capable of determination, as the "market price." The general rule is that the parties can agree upon any price they choose.
At common law no formality is necessary to the making of a sale. The seller and the buyer agree upon the price, which the buyer pays, the seller thereupon delivering the goods, thus completing the sale. A binding contract to sell for, and to pay, a certain price, however large, was good at common law, and remains good now, in all cases where the price is not large enough to bring the contract within the statute of frauds. See Statute of Frauds, (6) under Contracts.
When the purchaser lives remote from the seller the goods should be sent as the buyer directs. No directions for shipment being given, seller ships by the customary route. Ordinary care protects the buyer from loss sustained in the transit.
The seller of goods, under certain conditions, has a right to stop goods that are in a carrier's hands and on the way to the buyer at some distant point. This is termed stoppage in transit.
Should there be any defects in the property or animals, which can be seen, that does not relieve the buyer from meeting his obligations, though he claims not to have seen the defects. But if the defects can not be seen and the seller recommends the property as good or sound, the buyer is relieved from filling his part of the contract.
If the seller of goods makes any assertion respecting the kind, quality, or condition of the article upon which he intends the purchaser should rely as a fact, and upon which he does rely, that is a warranty. Where goods are sold by sample there is an implied warranty that the goods correspond with the sample.
It is a general rule that the employer will be bound by the warranty of his clerk or shopman, if acting within the scope of his authority.
Warranty must be at the time of sale; if it be made after, it is void for want of consideration.
If the buyer has been guilty of such fraud as entitles the seller to rescind the sale; or if the buyer is actually insolvent; or if he has misrepresented his condition or made false pretenses in buying; or if he be so embarrassed that in reasonable probability he cannot pay for the goods, the seller has a right to stop them in transit.
If the goods were sent to pay a debt of the seller's they cannot be stopped.
A public sale of property to the highest bidder is an auction sale and must be so conducted that free and fair competition may be had. By-bidding and combination bidding is unlawful and renders the sale voidable at the option of an honest buyer.
Sale of "Good-Will." - By good-will is meant a man's business or the business of a firm as distinguished from the stock in trade or capital. It is the reputation which a firm acquires by their business methods. A purchaser of a business including the good-will should insist upon a contract specifying the amount he shall receive as damages should the seller become interested in a competing business.